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Greater certainty on expropriation imminent

After a week of often heated debate and input in parliament.
Parliament heard that sometimes, when you attempt to correct a wrong, you can make unintentional new mistakes. Image: Shutterstock

Greater certainty on the content of the imminent change to the wording of Section 25 of the Constitution to give explicit meaning to the state’s power to expropriate property without compensation has emerged after a week of often heated debate and input in parliament.

At this stage it seems that the constitutional change will be limited in length, with the detail to be trodden out in the Expropriation Bill, which has just started its journey through parliament to the statute book.

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Read: What you might like to know about the Expropriation Bill (Mar 29)

At issue after this week’s inputs before the parliamentary ad hoc committee to amend Section 25 (the property clause) are mainly who will decide the amount to be paid in compensation (including a nil amount), whether anyone will be exempted from expropriation without compensation, how to balance the need for a thriving economy with the need for historical redress, and whether the state has the capacity to manage land reform successfully and sustainably.

‘Government must decide’

On setting the amount to be paid some ANC MPs, including co-chair of Constitutional Review Committee Party Dr Mathole Motshekga, have floated the idea of the state both deciding the amount to be paid for expropriating land and paying it, in the belief that involving the courts would delay redress and that the people have elected the government democratically in a way the courts were not, so the government must decide.

The implications of such a decision for the doctrine of the separation of powers were repeatedly raised, but the concept keeps resurfacing from some ANC MPs.

Several inputs from the Africanist perspective, including the National House of Traditional Leaders, Black First Land First and the EFF, argued that the whole point of the exercise is to right the wrongs of the colonial and apartheid past, and that this means ownership must be returned from whites to blacks on the same terms as those under which it was originally taken, namely without compensation.

From this argument flowed the contention that land under black ownership must be exempted from expropriation without compensation – it must be limited to land under white ownership only.

It is to be doubted that such racially-based proposals would themselves pass constitutional muster, and past experience has invariably shown that in the end ANC MPs vote as instructed by Luthuli House. But the way in which such arguments have clearly chimed with ANC members has been instructive nevertheless.

Balancing act

Two other main points of discussion were on how to balance the need for redress with the need for economic growth and, flowing from that, whether this can be achieved while the state has custodianship of the land reform process.

Input after input by those actively involved in the field of land reform proved the state to be corrupt and incapable, to the point that even ANC MPs stopped disputing the fact.

With no alternative implementing agent proposed, organisations like the Roman Catholic Church made the plain warning that sometimes, in your efforts to correct an indisputable wrong, you can cause even more damage through an ill-advised alternative.

Turning to inputs by different stakeholders, the Banking Association of South Africa (Basa) warned parliament that excessive use of expropriation without compensation could place great pressure on the local banking system, given the amount banks are owed in mortgages.

Basa CEO Bongiwe Kunene said the association supports sustainable land reform for economic growth, and does not believe current land ownership patterns to be sustainable.

Payment for improvements to property

It supports the envisaged strong role of the courts in settling the amount to be paid in compensation, including when that amount is nil. Basa is firmly in favour of payment for improvements made to the property.

As the holder of R1.6 trillion in mortgages, Basa issued a strong warning that if expropriation amounts are continuously set below market value, it would put pressure on those who must pay the mortgage, because the amount borrowed is the amount to be paid back, not the compensation amount.

It follows that if the compensation amount is too low to settle the debt owed on the mortgage, the banking system would be put under pressure, because of the increase in bad debt, causing a pincer-type crisis because banks are under statutory obligation to have enough cash available to honour payment of all deposits.

The Committee for the Advancement of the South African Constitution (Casac), represented by Lawson Naidoo, argued that although it believed a constitutional amendment to be unnecessary, the die was cast and the wording was the only contention.

Naidoo contended that the core question remains whether a constitutional amendment would make any difference to substantive land reform, given the corruption and incompetency within the state. He criticised the current debate for focusing on the interests of different elites, and the current ruling classes for not having a people-centred mindset prioritising the poor and the marginalised.

Casac believes some focus must shift away from rural land to urban land, to correct apartheid spatial planning, and that title deeds for those on communal property must be prioritised.

Fireworks

Fireworks followed when Andile Mngxitama of Black First Land First (BLF) brought the discussion back to basics.

He reminded the ad hoc committee that the process initiated by parliament three years ago, of which the intended constitutional change would be the culmination, was expropriation without compensation to correct the colonialist and apartheid past, but that the definition thereof had become limited in the debate to such an extent that it could render the process meaningless.

“This is a massive betrayal of black people. What was it supposed to achieve? The transfer and the return of land which is in white hands into the ownership of blacks. Will this constitutional amendment achieve massive changes in the patterns of land ownership?

“No, it will not happen. This process will not give land back to black people. What are you actually doing?

“It feels as if my car has been stolen but I am only allowed to reclaim the wipers and the threadbare tyres,” Mngxitama claimed.

He said both President Cyril Ramaphosa and EFF leader Julius Malema were not truly committed to land reform, given the limited intended scope of expropriation without compensation.

“All this is about is land that lies fallow and land not used by anyone. We are talking about the small bits of land the white people do not want,” Mngxitama said, asking for the current proposed constitutional amendment to be rejected and another to be drawn up.

“All land under white control was stolen and must be handed over to black people. Or nothing would have changed.

“No land under black control must be expropriated,” Mngxitama added, saying that the most corrupt of all systems was the current one which allowed 30 000 white farmers to control 80% of all land.

The National House of Traditional Leaders supported expropriation without compensation everywhere except for the land under control of its members.

Mandisa Shandu of activist group Ndifuna Ukwazi said expropriation must be used proactively in urban areas to change apartheid spatial planning and ensure access for the poor to housing opportunities in desirable parts of cities.

She emphasised that it serves little purpose to change the constitution as long as that state remains as incapable as it currently is. The Housing Act, for example, empowers municipalities to expropriate land for housing developments, but municipalities do not use these powers proactively.

Impact on lives

Representing the Legal Resources Centre, Wilmien Wicomb said the debate had to shift from a focus on the impact upon the lives of white people to the impact of expropriation on the lives of black people.

Expropriation is a continuing lived reality for many black communities who, for instance, lose their land to mining companies and are not paid anything even approaching market value in return.

The Roman Catholic Church asked for more substance and less sloganeering in the debate.

Mike Pothier, on behalf of the church, said they did not want to come out wholesale for or against expropriation without compensation – they are of the more nuanced view that it depends on circumstance.

The church supports the role of the courts in determining the compensation amount, and the discretion allowed in relation thereto. It supports a differentiation between the expropriation of land on the one hand, and the expropriation (with compensation) for improvements on the land, on the other hand.

Like several other groups, the church pointed out that differences between the wording of the proposed constitutional change and the Expropriation Bill may become problematic. Pothier said that, contrary to popular belief, the church no longer owns or administers much land.

Church ‘complicit’

Dr Mbuyiseni Ndlozi of the EFF attacked the church on the complicity of missionaries in colonial dispossession as well as what he termed the church’s ambivalence regarding expropriation without compensation, to which Pothier said the church did not harbour an ambivalent view at all.

Pothier said the church did not believe the act of passing a piece of land from one person to another necessarily ensures the productive use of such land, or that anyone would derive wealth from it, as the state’s current failed land reform policy clearly proves.

The church believes expropriation must take into account justice, redress and the current and future wellbeing of the country. Pothier warned that sometimes, when you attempt to correct a wrong, you can make unintentional new mistakes.

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COMMENTS   22

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Lekker. Drive the wedge between black and white in deeper.

In years to come this decision will be debated ad infinitum, there can be little expectation of success if one has not worked to succeed in life, that is not a right but a consequence of determination.

Feudal land, like that of the Ingonyama Trust, just keeps the people in perpetual servitude, Therfore from this argument tribal land under black ownership must NOT be exempted from expropriation without COMPENSATION. In fact, these land should be privatized now.

Then the rules of law should apply and there should be the legal right to contest everything.

EWC should be done away with as a thinking.

Fully agree, I am rather disappointed that none of the submissions to parliament seemed to address this aspect. As I was driving through Venda last week, I said – the people living there only need to be given title to achieve empowerment at almost no cost to government or the economy (but the political will to disempower the tribal indunas lacks)

Agreed 100% – the feudal tribal system is as bad as colonialism and apartheid. The Ingonyama Trust and the absence of title for our rural poor is the darkest stain on an already stained fabric of society. The African treatment of the ‘other’ needs to be scrutinized in full but is never!

Clever and wise decisions. I have seen it over and over, too clever is a short cut taken, ending normally with much emotion without sound thinking. Ending normally in more pain and more problems.
Wise decisions normally apply thorough thinking, calmness and good leadership.
Politics have plenty of clever and wise, hopefully South Africa will take the wise route.

These clowns have millions of hectares to dish out. Do that first, if you can, then see who still wants.

As we know this is just about taking from the whites regardless of those that just want a 100 Square meters to build and own the ground and house.

Andile, careful boet, you are poking the bear.

The land will eventually belong to the individuals who serve the consumer best. This eventuality is inevitable in a modern economy where supply and demand determine the value of all assets. The operator with the best profit margin will buy the property of the unprofitable farmer. The best interests of consumers put relentless pressure on the profit margins of producers. In this way, the consumer determines who owns land and who does not. If the beneficiary of land reform was able to add value to society he would have been able to purchase that farm in the open market already.

When the central planning state interferes with the fair and orderly market process to take land away from those who serve the consumer, to give it to those who don’t, then they will start a very expensive process. The consumer will pay twice for his tomatoes and potatoes, first at the grocery store, and again through taxes to support that farmer. The consumer will be the ultimate loser of land reform.

The fact that black consumers refuse to pay more for products that were produced by an emerging farmer on redistributed land, proves that black consumers do not support land reform. They don’t want land reform, they want affordable food. Black consumers support(vote for) commercial farmers and their property rights every time they purchase food.

The process of expropriation will bankrupt the state and put it at the mercy of lenders and donors who are the new colonialists. Expropriation of land in South Africa will benefit the consumers in China and punish the consumers in South Africa. It will destroy the local economy and support the Chinese economy. It will create jobs and food security in China, and destroy it locally.

I generally skip the articles and most comments and jump straight to Sensei. Why Moneyweb hasn’t started a weekly “Chronicles of Sensei” piece is beyond me. This would be much better than that Crypto dude they publish all the time

“All land under white control was stolen and must be handed over to black people.” – Unfortunately this is the view that the majority hold. There is no interest in actually tracing back through history using an evidence based approach. These politicians are spewing racist garbage and the problem is that the majority of the electorate seem to agree with this.

The future will hold untold suffering for this nation, suffering for which I will be apathetic. Those who vote in favour of this will deserve all the suffering that come to them, those who continue to live in lala land by simply ignoring this and making no provisions or preparations also will get no sympathy from me.

“It feels as if my car has been stolen but I am only allowed to reclaim the wipers and the threadbare tyres,” Mngxitama claimed.

Factually incorrect. It is convenient to view the current status of wealth as historical wealth that has been stolen. What was taken in years past was, at best, some rubber that was identified an as opportunity to build a car. The very same reason we simply export our cheap raw materials and then import expensive finished product. Has the watch been stolen because the gold was used.

By the logic of EWC above Ethiopia & Liberia should be the economic powerhouses of the continent as they were never colonized.

This whole lot is NOT going to end well !!!!

Stuffing with property rights is the same as stuffing with motherhood – you just don’t do it.

Have we learnt nothing from the Zimbabwe and other African disasters.

” Greater certainty on expropriation imminent” The only certainty is: Zimbabwe we will be like you soon.

The problem is basically that politicians spew lies and viscous racist rhetoric.

This tends to make people a little angry. Regardless of what is being discussed.

To disempower the integral economically active custodians of land for the sake of racial ‘justice’ is foolishness. A dwarfed intelligence quotient creates a leakage out from the production cycle of our economy, only to irrigate the land of corruption, using racial injustice as means of justification.

Economic injustice is far more catastrophic than racial injustice. A stomach could be fed during SA’s past racial injustices, but economic injustice is a precursor of famine, violent crimes, abuse of national power, widespread corruption/theft and war. This is reminiscent of a biblical reference of a ‘City without its walls.’

There is a difference between reparations and extortion. I advise the ANC to first make financial reparations of their destruction of the many lives and families they have caused and to stabilize the economy before anything else. Be exemplary in what you aim to achieve.

Is the government also looking at tribal land managed by chiefs? If the title deeds to those land is given to those already staying there you might find ‘transformation’ targets have been achieved already.

what happens when a black South African bought a farm from a white South African that bought it from the eleventieth owner since the 1600’s? Take it also?

Asking for a friend

With all respect to the journalist here, the content of the piece does not up to the title. This in itself is not an indictment of your journalism or piece itself but rather points to the fact that there isn’t any justice or long term solution to EWC. EWC will be open to abuse, this is not my opinion, just look at any “well meaning” system we in RSA have tried or are in the process of implementing. Those that are still running are either in disarray, or in advanced state of decay or took so many years and after so many boards of inquiries that they never got off the ground. This after what was most probably after countless millions of tax payer monies and job opportunities squandered. This across the multitude of races in RSA (the government encouraged racial divide which seems to keep the current lot in power) which government and all far socialist/communist “parties” conveniently seem to overlook. All of us that keep reminding those of the above government party and Che/Fidel wannabees, of Zimbabwe and Venezuela would better be served by telling this fact to a deaf Llama for all the good that would do. EWC will open up Pandora’s Box and will unleash as yet unknown & it’s subsequent unforeseen other hardships on us ALL. It’s is the height of delusion and it is dangerous. Just don’t do it…

I don’t know how this will end – i am more scared about a currency collapse if this goes the wrong way.

But I will like to ask black folks in general what are they going to do with the “land” once they get it.

Is it going to be used for housing developments, farming, industrial usage, commercial developments (high rise buildings) shopping mall development building schools, universities, hospitals and so on.

And if so, how do they intend to finance these projects.

because land is only valuable if there is something on it – or something beneath it.

I have just returned from our annual holiday on the Wild Coast / Transkei. Some of the best land in the country which has been in the hands of the blacks for decades but what do you find there? Enormous dongas, many animals and very little agriculture. Animals look after themselves, agriculture requires capital investment and management. What little agriculture there is consists of mielies but they are only for own consumption, there is zero commercial farming taking place that I can see. So I think it’s clear what we can expect to happen to land handed over for free to “farmers” who don’t care. 350 cows just starved to death at a “state of the art” dairy that was handed to the locals in Port St Johns, then there are dozens of other disasters that we know of. Humans do not appreciate anything that they received for free on a plate.

Foshan I was an Ag student in the early 70s and used to travel from Maritzburg down to the EC through the then Transkei. At Brookes neck you went from beautiful veld to desert. The fence line between Transkei and Natal, it was like a line in the sand. Has been ever since.

End of comments.

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